The takeaway from this article is that Sainsbury’s hasn’t taken off in Ludlow. It is only trading at 60% of the company benchmark for that size of store. M&S Food will be a head to head competitor. If M&S opens, Sainsbury’s will lose more trade. If the analysts are correct, it will then be trading at just 55% of the company benchmark.
The planning system supports competition. If one supermarket leads to closure of another, that is of no concern to planners. Sainsbury’s might not close but in the current retail environment any business that is not hitting high fives is at risk of shutting its doors permanently.
These are tough times in the retail sector. I’ll write on any potential impact of M&S Food on the town centre in future article.
There have been mixed reactions to the design of the proposed M&S Food store on the edge of town. Some like it. Some like me don’t. Many people want M&S to come to town, some think we don’t need it or it will lead to even more shop closures in the town centre. Many think it should be located on the former Budgens site.
This article looks at a different aspect of the proposal. The impact M&S Food will have on Sainsbury’s.
This is the second application from M&S for a food store in Ludford. The first was withdrawn after it became clear that it would not be approved because of its design and because the retail impact assessment was not up to scratch. The current application (23/04457/FUL) is accompanied by an up to date impact assessment. This runs to 115 pages.
The retail impact assessment is based on a study area that stretches from Clun to Tenbury and Cleobury Mortimer, and from Craven Arms to Orleton. The area has an estimated population of 43,639 people, with 11,085 of those in Ludlow (25%). I’ll be looking at who shops in Ludlow and where people who live in Ludlow shop in a later article.
Tesco has an estimated turnover of £20.20 million, double its benchmark  turnover of £10.36 million. Tesco is classified as being in the town centre. Aldi is edge of centre and has an estimated turnover of £18.82 million, nearly twice the company benchmark of £10.33 million. Both stores are regarded as “overtrading”.
Sainsbury’s has an estimated turnover of £9.93 million, just 60% of its benchmark of £16.55 million. The analysts predict that M&S Food will draw 27.5% of its turnover from Sainsbury’s by 2028. That will reduce the take at the tills to £9.73 million, just 55% of the company benchmark.
Sainsbury’s will need to revolutionise its offer to take £8 million more each year to hit the company benchmark. Or, with the Rocks Green store substantially underperforming other stores, Sainsbury’s management might decide to close the store.
Could Sainsbury’s improve? Everywhere can. Being more receptive to customers who do not drive will help a little. A bus stop and bench on Duncow Road would be a real bonus. But shoppers on foot will not be enough to turn an underperforming store around.
Could M&S Food suffer eventually suffer the same fate as Sainsbury’s? Will it fail to thrive in our rural location. I suspect not. There is a lot of support for M&S in Ludlow and the surrounding area. It could make a better go of it than Sainsbury’s has managed so far. And if Sainsbury’s closes, M&S is likely to take much of its trade.
We know that making predictions about retail performance is pretty much a fool’s game. Witness Shropshire Council’s disastrous purchase of the Shrewsbury shopping centres. But should Sainsbury’s close, it seems unlikely that the proposed M&S Food store will have enough car parking spaces to cope.
. The benchmark turnover for each supermarket group is based on the average across the group for that size and type of store.
. Overtrading is retail industry jargon. Many shoppers would regard overtrading more prosaically as being busy and profitable. However, in battles to introduce a new supermarket into the local market, overtrading is often used to justify claims a new store is needed.